Research On Earnings Quality Evaluation Of China's Real Estate Listed Company

Earnings is the important component of the accounting information and reflects the operation result within a certain period. Investors, creditors and government departments take it as an important decision-making basis and it is usually used to evaluate business performance of managers. But in recent years many major financial fraud incidents appear frequently, such as America's World Communication and China's Kelon, it forces the vast investors to concern the earnings quality. Based on the background, evaluating earnings quality becomes an inevitable trend, but how to evaluate, scholars have different opinions. This paper takes real estate listed companies as the research object and analyses earnings quality.Firstly, this paper analyses the domestic and foreign research achievements, and expounds agent theory and asymmetric information theory and defines the earnings quality concept, then explains earnings quality related problems: differences and contacts between earnings quality and earnings management, characteristics and the influent factors.Secondly, this paper describes simplely the design of factor analysis model, including the principle of index selection, the structure of comprehensive evaluation indexes and the basic steps of factor analysis.Thirdly, this paper introduces the background of China's real estate industry, establishing evaluation index from marketability, sustainability, growth and profitability, selecting financial data of China's estate listed companies from 2007 to 2009, establishing evaluation model of earnings quality, analysing the results of data, and evaluating earnings quality in 2008 and 2009.Finally, from both macro and micro levels, it presents policy and suggestions of improving earnings quality of China's real estate listed company.